Big Accounting Firms Looking At Financial Reporting 2.0

from the time-for-a-change dept

So far, the internet hasn't done a whole lot to change the financial industry, outside of a few consumer-facing services like online banking and trading. Many of the old institutions remain in place. Earlier this week, there was some noise about the SEC letting companies post material information on blogs, but on inspection, it really didn't seem like that big of a deal. A potentially more important announcement came yesterday, when a a group of the major accounting firms declared that the existing system for reporting financial results was antiquated. They called for more reporting in real-time, and in a form that's more easily accessible than the SEC's typically labyrinthine documents. Of course, they were pretty light on specifics, as it's really not clear how companies would go about reporting financial data in real time. Nor is it necessarily a good idea, even if it were possible. Companies need time to digest information, and then present it in a clear way. And already, there's a lot of concern that being scrutinized on a quarterly basis leads to short-term thinking. The goal should be to develop reporting methods that are more transparent and easily understandable, and on this point, the major accounting firms are in a good position to take the lead.

financial reporting

I do all the financial reporting for my department and I really don't see how any real time reporting would be beneficial for us. We're implementing a real time function for people that donate to check their donations but insofar as me generating reports as money comes in or is spent I don't see much need for any web 2.0 finery.

OK, the big 6 accounting firms are the ones who gave companies the advise that backdating stock options would be a good idea. The big accounting firms were involved in the Enron situation. They all were involved in fraud in billing their clients money for travel expenses that they didn't actually incur.

Sounds to me like the Fox is telling the chicken how to secure the henhouse. Why should the govt. listen to them? They are either as stupid as their clients, or as crooked as their clients.